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Economics for well-informed citizenship

I am often appalled and troubled by the apathy and lack of basic knowledge by many citizens concerning the functioning of our economy. Whenever I take part in a discussion where economic issues arise, whether at the workplace, in a taxi or at the bank, I usually ask, to gauge the level of economic awareness, three simple questions:

1. How many barrels of oil does T&T produce per day?

2. What currency do we use to pay for imports of food, medicine and motor cars?

3. How do we earn or get that currency?

The answer to the first question usually ranges in the one-two million of barrels per day (way beyond the 75,000 barrels per day we actually produce), while the latter two questions invariably elicit garbled responses.

Does a knowledge of the basic workings of our economy matter? Well, while many of the issues we face as a nation are not necessarily economic—they primarily involve social, political, cultural, technical and biological dimensions—no matter how non-economic an issue may seem, on closer examination, there is always an economic element to these problems.

For example, the causes of crime are essentially sociological, psychological and behavioural but the economic consequences are tremendous. Every year more and more resources are devoted to tackling escalating crime. In fact, for fiscal year 2015/2016, the Government has allocated the largest amount of money ($10.8 billion or 17 per cent of total budget) to the Ministry of National Security.

If more resources are being pumped to fight crime, then it means that, as a country, we have less available to spend on education, health, infrastructure, etc. That’s the opportunity cost.

The foregoing comments suggest that if we are to be well-informed citizens, it is necessary to have a basic understanding of economics. Should the fuel subsidy be reduced or eliminated? What action can be taken to reduce unemployment? Should the TT$ be devalued? Should there be a national commitment towards diversification of the economy? What has been the impact of globalisation on our economy? Should there be a return to foreign currency controls?

Should there be a more equitable distribution of income? Are present welfare programmes justifiable? What are the implications of increased government borrowing? What should government’ role in the economy be? Should there be further divestment of state corporations? What should be done to reduce inflation?

Moreover, the answers to most of these questions are largely determined by those we elect to public office ie politicians. As citizens, if we are to make sensible and wise decisions in the voting booth, it is essential that we have a basic knowledge of economics coupled with contending political parties’ proposals for dealing with various economic issues.

While voting patterns in T&T are mainly based on ethnicity, we are being told by political pundits that there is a growing body of swing voters, especially in marginal constituencies, who vote on issues. While this may be true, the extent of the swing vote is debatable.

Nevertheless, the incumbent government should seriously take note of the fact that for the last 20 years or so, for whatever reasons, issues or otherwise, we’ve continously changed government.